Correlation Between Agha Steel and Amreli Steels
Can any of the company-specific risk be diversified away by investing in both Agha Steel and Amreli Steels at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Agha Steel and Amreli Steels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agha Steel Industries and Amreli Steels, you can compare the effects of market volatilities on Agha Steel and Amreli Steels and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Agha Steel with a short position of Amreli Steels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agha Steel and Amreli Steels.
Diversification Opportunities for Agha Steel and Amreli Steels
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agha and Amreli is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Agha Steel Industries and Amreli Steels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amreli Steels and Agha Steel is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Agha Steel Industries are associated (or correlated) with Amreli Steels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amreli Steels has no effect on the direction of Agha Steel i.e., Agha Steel and Amreli Steels go up and down completely randomly.
Pair Corralation between Agha Steel and Amreli Steels
Assuming the 90 days trading horizon Agha Steel Industries is expected to under-perform the Amreli Steels. But the stock apears to be less risky and, when comparing its historical volatility, Agha Steel Industries is 1.32 times less risky than Amreli Steels. The stock trades about -0.27 of its potential returns per unit of risk. The Amreli Steels is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest 2,616 in Amreli Steels on November 5, 2024 and sell it today you would lose (231.00) from holding Amreli Steels or give up 8.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agha Steel Industries vs. Amreli Steels
Performance |
| Timeline |
| Agha Steel Industries |
| Amreli Steels |
Agha Steel and Amreli Steels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agha Steel and Amreli Steels
The main advantage of trading using opposite Agha Steel and Amreli Steels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agha Steel position performs unexpectedly, Amreli Steels can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Amreli Steels will offset losses from the drop in Amreli Steels' long position.| Agha Steel vs. Wah Nobel Chemicals | Agha Steel vs. JS Investments | Agha Steel vs. Nimir Industrial Chemical | Agha Steel vs. NetSol Technologies |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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